One of the questions that have been bothering most fans of games of chance in the US is whether or not online gambling is legal, both on the federal and the state level. However, that question is a bit more complicated than most people think. We cannot give you a definitive yes or no answer. In fact, this matter calls for an exhaustive debate.
First, the crucial thing to understand is that no Federal law prohibits online gambling. People often misconstrue the Federal Wire Act of 1961 and fail to understand that it only pertains to interstate betting on sports. No other form of gambling is even mentioned, let alone regulated by the Wire Act.
However, in 2011, Virginia Seitz, an assistant US attorney general and head of the Department of Justice Office of Legal Counsel, ended the debate. She concluded that, since the act only regulates sports betting, other forms of online gambling are exempt from federal regulation.
The second source of false assumptions is definitely the Unlawful Internet Gambling Enforcement Act of 2006. Again, the act in no way prohibits online gambling. It does, however, outlaw Bank Wire Transfers, but only in situations where the money transferred between the two parties is generated by illegal online gambling.
The Peculiar Wording
Still, the general public has interpreted the Act (and still does, to some degree) as the “baddie” that doesn’t let us have fun online. Even if that were the idea behind it, the wording of this legal document leaves plenty of opportunities for casino operators to circumvent it and continue providing their services to the US audience.
Word for word, the UIGEA states that nobody can “accept any funds associated with a person participating in illegal online gambling.” First and foremost, it doesn’t portray every form of online gambling as illegal. But even if it did, the word “accept” would still open up a rather large loophole.
Still, hundreds of online casino operators decided they would rather stop catering to the US audience than actually deal with the rules and regulations the UIGEA brought forth. Others have realized that all they had to do to continue servicing the US gamblers was add a third-party payment processor into the mix.
The headquarters of many of the US-oriented online casinos aren’t within the States, so the rules would pertain only to the players themselves. And neither this nor any other law could forbid you from sending over funds to an independent payment processor.
Countless debates have been held in an attempt to better understand the implications the UIGEA has on the legality of online gambling in the USA. At best, it just extended the waiting period when players from the US go to claim their winnings at an online casino.
Consequently, the Unlawful Internet Gambling Enforcement Act has been severely criticized by several notable figures within the gambling industry. Still, the question remains. What does all of this mean for US citizens that want to gamble online?
The State of Online Gambling in the USA
Again, the answer is far from simple. Just because there’s no all-encompassing Federal online gambling law, it doesn’t mean all forms of online gambling are automatically legal. It simply means that the matter needs to be resolved on a state level.
As you can imagine, all 50 states have different opinions and individual state laws that define the legality of online games of chance. The matter is further complicated by making a distinction between online lottery, online casino and poker, and online daily fantasy sports.
Even before the official OLC opinion in 2011, prior to the rise of online lotteries, real-money gambling on the Internet was perfectly legal in several states. Nevada, which is the most pro-gambling state, has even legalized online sports betting years before the recent legislative efforts.
Although it may sound like Nevada’s view is conflicting with the now 58-year-old Wire Act, in reality, it isn’t. The key is that the Act prohibits interstate betting on sports events. In other words, anyone residing in Nevada could, and still can, bet on sports on the Internet.
As for other forms of online betting, Delaware and New Jersey jumped on Nevada’s bandwagon, and the three states started launching their own online poker and casino sites in 2013. So online poker rooms and an array of casino games are available to anyone living within these three states.
But what about the other states? Well, we won’t bore you with each of the individual states’ legislatures. Instead, here’s a quick rundown of the states in which the aforementioned types of gambling are legal. If yours isn’t among them, you’ll have to make do with a brick-and-mortar casino experience.
Since the 2011 OLC interpretation of the Wire Act, five states have been offering lottery and instant-win tickets online. However, Minnesota had a change of heart and promptly repealed online lottery. Today, online lottery is legal in the following four states:
Online Casino and Poker
Online casino games have been rapidly growing in popularity in recent years. However, only three states have embraced them and launched their own online gambling sites since 2011. These are:
- Nevada (only poker)
- New Jersey
That said, several other states are already considering the legalization of online casino and poker games. Still, it will likely take some time before the necessary bills are passed. Pennsylvania has only recently legalized online casinos (2017), and more states might soon follow suit.
Daily Fantasy Sports
We must admit that gamblers are quite inventive. Although online sports betting is still prohibited by Federal law across the United States, casinos have managed to find a way to enable betting on sports events.
Admittedly, Daily Fantasy Sports are a different type of betting on sports events. Still, they allow sports fans to cash in on their knowledge. Namely, you draft players into a fantasy team and compete directly with other gamblers. Based on their real-life performance, each individual in your team will accrue a certain number of points. The more points they gather, the more money you’ll win.
This turned out to be a rather intriguing concept and has captured the attention of sports fans across the US. Consequently, nine states have already legalized DFS, with many others considering it.
Currently, Daily Fantasy Sports contests are legal in:
- New York
What’s the Verdict?
As you can see, online gambling laws are a fickle matter. It took half a century until a definitive interpretation of the Wire Act finally put a stop on all the debates and deconstructed the myth that all forms of online gambling in the US were prohibited.
The end result was that each individual state is free to treat different forms of online gambling as they see fit. Many have already regulated online gambling, while many other states are either considering it or are in the process of creating the appropriate online gambling laws. This shouldn’t come as a surprise. After all, the online gambling industry contributes over 130 billion dollars to the US economy annually.
However, there’s one thing to keep in mind. Although there are plenty of legal online casinos that accept players from the US, you must still be familiar with the online gambling laws of your own jurisdiction. So even if you’re not from one of the states where legal online gambling is a thing, you may still be able to play and even win at an online casino. However, you’ll never receive your money because you’re technically participating in illegal activity.